Over the years, some financial institutions have sent workers over to the homes or workplaces of customers who have defaulted in the payment of their loans to retrieve the “locked-up” funds.
While some monies are declared bad debts because financial institutions are unable to retrieve them due to several factors, borrowers, on the other hand, go back and forth before settling their debts.
He explained that the setting up of this specialized court that will look at loan default cases will improve the borrowing culture of SMEs.
Speaking at the National Economic Summit on Friday, February 2, 2024, in Accra, Mr. Sackeyfio said SMEs will honor their due if they know they will be prosecuted for defaulting in the payment of their loans.
He said, “Facilitate the setting up of bank loan recovery courts that will sit regularly with strict delivery of timeliness for closure of loan defaults cases to improve the borrowing culture of SMEs. We know that sometimes defaults come in when businesses are down. Other times, they come in because the businesses don’t want to pay and if there is a specialized court to handle these defaults, one, it will encourage the banks to step up the businesses and two, the culture of borrowing will be improved.”
“If an SME borrows, and they know that they don’t pay, there is a specialized court that will come for them,” Mr Sackeyfio added.
Businesses have however bemoaned the high cost of doing business in Ghana due to the interest rates on loans.
Meanwhile, the Bank of Ghana at its recent Monetary Policy Committee meeting in Accra reviewed the policy rate from 30% to 29%.